Development of Procurement Cadre as Part of Holistic Procurement Reforms in Bhutan

{This article is an abridged version of the submission on “Procurement Cadre in Bhutan” made by Ms. Jamyang Dema, Ministry of Finance, Thimphu, Bhutan, for the South Asia Procurement Innovation Awards.}

Summary

The Royal Government of Bhutan embarked on reforms in its National Procurement System very early (September 2005). The Royal Civil Service Commission has played an enormous role in taking these procurement reforms forward. The Government recognized the need to professionalize procurement within its civil service and also approved the creation of the Public Procurement Policy Division (PPPD) under the Ministry of Finance to allow the latter to take procurement reforms forward in an exponential way. Coupled with other initiatives, like e-procurement and standardization of bidding documents, these reforms in human resources for procurement have contributed significantly towards development of an efficient and effective procurement system in Bhutan.

Background

Landlocked between China and India, Bhutan is a small kingdom covering nearly 38,500 square kilometers in the eastern Himalayas. In the last couple of decades, the Kingdom of Bhutan has experienced rapid social and economic development, as a result of prudent macroeconomic management, beneficial exploitation of hydropower resources, and substantial support from development partners. As part of the reforms to ensure good governance, the Royal Government of Bhutan (RGoB) has undertaken various steps towards creating an efficient, effective, transparent, and fair national procurement system. The Public Procurement Policy Division (PPPD) was established within the Ministry of Finance in August 2008 to facilitate policy and professional development in the field of procurement. After establishment of the PPPD, the Royal Civil Service Commission felt the need to create a Cadre of Procurement staff and station procurement officers in different departments to carry out Government procurement efficiently. The Competency Framework for Procurement positions and job descriptions was approved by the Royal Civil Service Commission. The Procurement Cadre System has been so integrated that it ensures career development of civil servants in the country, which makes it a unique innovation from Bhutan. This experiment of stationing procurement officers in Ministries, Dzongkhags and Autonomous agencies, coupled with other initiatives like e-procurement and standardization of bidding documents, has led to major improvements in efficiency of procurement and public expenditure management in RGoB.

Challenges Addressed

The challenges addressed by introduction and establishment of procurement cadre are as follows: 1) Introduction of the Procurement Cadre System to establish a clear line of reporting, where Procurement personnel report directly to the Public Procurement Policy Division (PPPD). 2) Capacity development issues were addressed by imparting awareness and training on public procurement. 3) Professionalization of procurement personnel under Government agencies was taken up as one of the topmost priorities after implementation of Cadre System. 4) Performance of procurement personnel was improved. 5) Under-utilization of procurement expertise issues were addressed through clear lines of responsibilities within the job description and Competency Framework.

Innovations in the Solution

Procurement cadre is one of the tools used by RGoB to professionalize Procurement personnel and improve the efficiency, effectiveness, and efficacy of the Procurement process. The Cadre System has enhanced the competence of national procurement, and strengthened the Procurement Competency Framework. It will enable individuals to identify gaps in their current competencies related to their current roles, and assist in training needs analysis and development of future personnel development plans. A consistent point of reference and benchmark for procurement performance can be set with implementation of the Cadre System. The Procurement Competency Framework, based on National Occupational Standards in Procurement Management and collective analysis of other Government procurement frameworks internationally, provides an opportunity for procurement to be consistent across all departments at each of the levels in the Himalayan Kingdom. This will enable RGoB to be more confident in its capability internationally

Impact Generated

The Cadre System, introduced and implemented by the Royal Government of Bhutan, has brought in many positive impacts. They are:

Introduction of training course - Certificate in Procurement Compliance (CPC) for all personnel involved in procurement, including tender committee members at all levels of the Government.

Incorporation of a Module on Public Procurement in Post Graduate Diploma in Financial Management (PGDFM) Course at the Royal Institute of Management.

The Competency Framework enables RGoB to align procurement roles with its objectives and overall business requirements. It can be used to design different roles for different levels of seniority. The identification of key core business skills versus procurement skills can be balanced against the requirements of different Government departments and contextualized to individuals who operate in these departments.

The aim is that in the future, the Competency Framework will align the skills for the job role, and not the job holder, which will assist in recruitment and career progression.

Timely procurement and supply of goods, works, and services essential for smooth running of the Government organization.

Consolidation and restructuring of the procurement Human Resource cadre, with creation of an additional level, making it more amenable to efficient and effective delivery of procurement and supply services.

Provision is also being made for supporting staff to assist officers of the cadre.

Scalability and Sustainability

The Procurement Cadre System can be replicated in other countries across the world, weighing the benefits that the Cadre System brings in the Government Organization, from the impact it makes, and the lessons learned from such a system. Organizations in other countries can set Bhutan’s Cadre System as an example and pilot it in their organizations and, if proven successful, they can adopt the Bhutan’s Procurement Cadre System itself. The Competency Framework and job description of Procurement personnel are designed in a very systematic and motivational way, which facilitates its replication anywhere in the world.

Lessons Learned

With implementation of the Procurement Cadre System, the Royal Government of Bhutan has learned lessons, including:

A detailed research on the existing system will have to be carried out before introducing a new system.

Acquire necessary approvals and recommendations from the relevant agencies for support during implementation.

Incorporate feedback, comments, and suggestions from the relevant stakeholders to keep them informed.

Carry out consultative workshops with the stakeholders concerned to incorporate their needs and opinions on the cadre system.

There is a need to incorporate international best practices from other countries that have implemented such a system.

Harmonization of existing Government policies and practices within the Cadre System.

Attainment of transparency, competitiveness, cost effectiveness, and professionalism in the Public Sector Procurement System.